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Marine Cargo Insurance and the Coverage It Provides

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Marine Cargo Insurance

People and companies rely on the shipping and logistics industry – from a family relocating their things from one country or region to another, to manufacturers, wholesalers and retailers that use sea freight to continue their business operations. The following are the reasons why you need maritime cargo insurance.

If your company is involved in the transportation of products by sea freight, you will need to be certain that you have reliable sole trader insurance in place to protect both yourself and your company from any risks that may arise along the road. Losing or destroying items may have a devastating impact on your company’s financial line; thus, not having proper insurance is just not worth the risk.

However, what exactly does maritime cargo insurance typically cover? And are there any exclusions for which you would need to get extra coverage?

What Does Marine Cargo Insurance Cover?

Marine cargo insurance is intended to protect you against accidents and unanticipated events that may result in the loss or damage of your cargo while it is in transit on the sea. The aim is to keep your company from experiencing revenue losses. That is a broad term — in reality, there are several different types of coverage to consider depending on your company operations, risk exposures, and a variety of other variables.

There are two primary forms of Marine Cargo Insurance to consider: (1) Comprehensive and (2) Limited Liability.

Coverage for Named Perils (also known as “All-Risk Coverage”)

What Is the Meaning of Perils Coverage?

It is important to note that Named Perils Insurance, also known as Institute Cargo Clauses B & C, provides restricted coverage because it only covers loss or damage caused by certain hazards as specified in the policy. It is worth taking into consideration that you are not protected against any risks that are not specifically mentioned in the policy.

The following types of damage or loss are often covered by Named Perils insurance: Collision, fire, stranding, sinking.

What Exactly Is All-Risk Protection?

All-Risk Marine Cargo Insurance, commonly known as Institute Cargo A, is the most comprehensive type of marine cargo insurance available. It provides coverage for all sorts of damage and loss, with the exception of those specifically excluded under the policy.

While All-Risk Marine Cargo Insurance provides more safety and security for your business and assets, it is crucial to be aware of the frequent limitations that apply to this type of insurance. One thing you should monitor closely are any exclusions that are listed in the policy.

Exclusions in a Marine Cargo Insurance Policy: What Are Some of the Most Common Exclusions?

Exclusions in an All-Risk Marine Cargo Insurance policy might vary based on the insurer and the nature of your operations; however, the following are some of the most typical exclusions in an All-Risk Marine Cargo Insurance policy:

  • Negligence that arises due to mistakes, wrongdoing, or omissions made by carriers or ship crew members.
  • Failure of a carrier or shipping firm to pay its debts
  • Failure to deliver items to a customer.
  • Wear and tear – normal wear and tear, as well as breakage
  • Misbehaviour is defined as wilful misconduct on the part of the policyholder or insured.
  • Inherent vice is defined as the destruction or degradation of things that occur as a result of the natural nature of a product or a faulty feature.
  • Delay

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Every company has its own set of requirements, and a policy may be adjusted to meet those requirements. The most important thing to remember about insurance is to understand the particular terms of your policy and exactly what you are insured for in order to prevent financial hardship as a consequence of an incident or claim.


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